Japan & China: Asahi Breweries to invest �800 million aiming to increase Beijing plant capacity

Asahi Breweries Ltd. will invest JPY800 million to double capacity at its plant in Beijing, Shanghai Daily reported citing Japanese newspaper Nihon Keizai, China Knowledge released July 24.

According to the report, the new equipment at the brewery is expected to start operating in April.

The report also mentioned that with Asahi’s plan to open a new brewery in Zhejiang province in May, the combined capacities of the Bejing and Zhejiang breweries will raise the brewer’s annual capacity to 820,000 kiloliters, the largest among Japanese breweries in China.

Japanese beer companies are shifting their attention to China due to poor sales in their own country; and major beer companies like Asahi Breweries, Suntory and Kirin Brewery are attracted to their neighboring country where demand for beer is growing.

Last year brewers made 300 million hl of beer in China, an increase of 5% over the same period the previous year, more than in any other nation.

In 2004, China beat the U.S. to become the top consumer of beer in the world.

However, foreign beer-makers find it difficult to make profits in China due to Chinese drinkers’ preference for cheaper locally-brewed beer.

Foreign brewers like Foster’s and Lion Nathan have pulled out of China due to losses and even beer giant Anheuser-Busch, which brews and sells Budweiser in China, reported declining profits in the first quarter this year.